MARKET CLOSE: Profit taking drags techs lower

January 2, 20024:43 PM PST

Technology investors took some profits Tuesday, pushing the Nasdaq composite down 19 points to 3,214.94 on record volume of 1.46 billion shares exchanged. The Dow Jones industrial average closed off 102 points to 10,617.32.

Analysts conceded that after closing at a record high in the past seven trading days, investors needed to take a little break from their buying spree.

"I think it's a little bit of profit taking," said Guy Truicko, portfolio manager at Unity Management. "Things were getting a little too optimistic. They started to get to levels where the selling came in. Nasdaq had been red hot for two weeks."

Traders were also a bit cautious ahead of Wednesday's Producer Price Index figures, a key barometer of possible inflation.

After riding strong gains for more than a week, Internet stocks finally retreated.

Amazon.com Inc. (Nasdaq: AMZN) lost 7 3/16 to 70 13/16 after the online retailer said it was launching four new stores, or online shopping sites, for home improvement, software, video games, and gift ideas. Amazon also said it had acquired Tool Crib of the North, a tools and equipment catalog company.

CMGI (Nasdaq: CMGI) clipped 5/16 to 103 15/16 after announcing its Engage Technologies (Nasdaq: ENGA) unit is forming an alliance with Flycast (NASDAQ: FCST)- an advertising network that CMGI agreed to acquire in October in a deal valued at roughly $700 million. Engage shares closed up 2 3/8 to 46 3/8 and Flycast Communications lost 5/16 to 47 3/16.

Cisco Systems Inc. (CSCO) closed off 1 1/16 to 74 1/4 ahead of its first-quarter earnings report. It also announced it would buy Aironet Wireless Communications (Nasdaq: AIRO) for $799 million to improve wireless access for its business customers. Aironet shares closed up 2 1/8 to 45 3/8.